Why Is a Contract Important?

contract-important Image Source/Image Source/Getty Images

A contract is important because it can be used in the legal system to ensure that both parties of an agreement are equally compensated for their work, goods or money. Contracts are legal agreements that may or may not be written.

Contracts are used mainly in business situations, but also for personal situations. Not all contracts are valid, even if they were voluntarily signed by all parties. The agreement described in the contract must be legal and voluntary for it to be enforced by law. While both parties must receive a fair value for a contract to be valid, they may not receive the same benefits.